Amazon is expanding its European market share. Its recent entry into the Polish market boosted it even further. But how does it look from the sellers’ perspective? Is it really such a great deal? How the brands sell via the marketplace, and what are their thoughts about this retail giant?
Pattern provided The Amazon Europe Poll and surveyed for this purpose 30 brands that are selling on Amazon. They are from different industries like Automotive, Baby, Computing, Consumer Electronics, DIY, Fashion,
Food, Healthcare, and Toys. They answered some questions about selling on Amazon, their experiences, and their presence in this marketplace. If you are interested in the full report, you can download it here. Below you will find some of the most important highlights.
Local actions are important
There are three aspects when it comes to running a business on Amazon. The brands need to take care of Amazon Strategy, Amazon Pricing, and Amazon Advertising.
Most of the brands admitted that when it comes to ads, managing them locally has the greatest sense. No wonder Amazon operates in many markets and has a huge audience. And thus, local factors are sometimes overlooked. This is why it is important to narrow down your advertisement’s sphere of activity as much as possible. Just to ensure that the advertisement has reached the target audience. If the products you sell are local, it makes no sense to invest in global or even regional advertising. When it comes to prices – managing it regionally and locally have similar results. It can be said that it all depends on the type of product and the market – whether it is very price sensitive or not. The issue of strategy is a very individual matter. A car tire seller has a different approach from the one who sells prams. Nevertheless, in this matter, brands focus on regional character. After all, everyone, no matter if clients live in a small village or a big city, they will have to buy a pram when after the baby’s birth, right?
Sponsorship is the main promotion
Sponsored ads and brands are leaders when it comes to advertising on Amazon. About 80% of surveyed brands are using, and only 6.7% and 10% didn’t use it at all. Also, 10% of them have used it before but no longer do it.
As you may see off platforms ads and products display have the lowest interest among respondents. In addition, 16.7% of brands never discovered DSP and merchandising programs, but some have used them before and no longer do it.
Cyber Monday is not much of a deal on Amazon
If you asked a salesperson or supplier what time of the year is most important to them, Black Friday would probably come up. But how is it on Amazon? After all, marketplaces have their own rules.
The first place in this comparison has Pre-Christmas sales. It is very important for a ⅓ of the respondents. For many of the brands (26.7%), both Prime Day and Black Friday are extremely important. We can say that Black Friday is the begging of Pre-Christmas sales. So the end of the year is always quite essential for Amazon sellers.
What is the least important event when it comes to online sales on Amazon? For 20%, it is Cyber Monday, Post-Christmas sales, and January sales. So it could be said that the begging of the year is not so profitable. Maybe many of the New Year’s Resolutions are to spend less online?
Even Amazon has some pain points
And the biggest one is dealing with price erosion. It is an extremely painful aspect for closely 17% of brands, and for 30%, it is quite painful. Price erosion is a problem that is visible and disruptive for sellers, not only among Amazon sites.
The lowest rates in the case of pain has a category named dissatisfied retail partners. 30% of sellers said it is not painful at all and about 43.3% (the highest rate in the whole comparison) admitted that it is only a little painful.
Amazon’s perception is not without flaws
Many of us perceive Amazon as a retail giant without any scars. You can find basically everything at relatively low prices. But how about the sellers’ perspective. Does Amazon pass the exam with flying colours?
About ⅓ of reviewed brands say that they feel natural about Amazon in the case of professional capacity. About 27% said that it is somewhat positive. All together very negative and somewhat negative stand for 23.4%. Amazon’s image may be considered relatively positive.
COVID-19 has an impact on Amazon sales too
E-commerce and online shopping were a huge relief for many consumers across the whole globe while pandemic hits. Demand was huge, so many sellers have struggled with it also when it comes to Amazon.
The biggest problem was getting products into Amazon warehouses – half of the brands have struggled with it. A little fewer – 46.7% had a problem with their own supply chain getting disrupted.
Also, quite a big deal was that inventory didn’t appear online after being delivered to Amazon warehouses – 30% of the brands.
Amazon’s seller suffers from Brexit too
Brexit has been a huge rollercoaster for European trade and logistics. Although everyone knew it was coming, consumers and sellers both felt the effects of it when it hit.
And the same was true with Amazon; after all, it covers many European countries, the UK included. More than 43% of sellers said they expected minor changes due to Brexit, and 30% admitted that their expected changes were significant. It is clear from this that Brexit impacts the entire European market, regardless of whether it is an offline or an online channel.
Amazon is the future for most sellers
Is Amazon’s future in bright colours? According to this survey, it is.
Half of the reviewed brands said that they are planning to move to a hybrid Amazon model. Little less – 43.7% admitted that they are considering international expansion through Amazon. But on the other hand, almost 48% of sellers claimed that they are going to expand their business but through another marketplace. Nevertheless, these numbers are quite a good score and showing that Amazon is still perceived as a place to grow.
Over to you
Amazon is a great place for sellers, especially if they want to reach international audiences. This great marketplace has huge potential, but like everything else, it has its pros and cons. Undoubtedly, many sellers benefit from being present on Amazon, which does not mean that they do not see this marketplace’s disadvantages.
They have various attitudes about this web, but they mostly connect their future to Amazon.